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MasTec (MTZ) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified MasTec ( MTZ) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified MasTec as such a stock due to the following factors:

  • MTZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.4 million.
  • MTZ has traded 268,591 shares today.
  • MTZ traded in a range 200.8% of the normal price range with a price range of $2.32.
  • MTZ traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MTZ with the Ticky from Trade-Ideas. See the FREE profile for MTZ NOW at Trade-Ideas

More details on MTZ:

MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for energy, utility, and communications infrastructure primarily in the United States. MTZ has a PE ratio of 24.5. Currently there are 7 analysts that rate MasTec a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for MasTec has been 734,500 shares per day over the past 30 days. MasTec has a market cap of $3.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.13 and a short float of 14.6% with 11.54 days to cover. Shares are up 20.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MasTec as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 24.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.90% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MTZ should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MASTEC INC has improved earnings per share by 8.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASTEC INC increased its bottom line by earning $1.74 versus $1.43 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.74).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Construction & Engineering industry and the overall market, MASTEC INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $75.41 million or 31.22% when compared to the same quarter last year. Despite an increase in cash flow of 31.22%, MASTEC INC is still growing at a significantly lower rate than the industry average of 134.18%.

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